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Rupee appreciation affects textile export

28
Jun '07
The Cotton Textiles Export Promotion Council (TEXPROCIL) together with leading exporters of Cotton Textiles held a press meet at Hotel Trident Hilton, Chennai on June 27, 2007.

During the meeting, Prem Malik, Chairman, TEXPROCIL, discussed critical issues, the industry is facing today.

The details of Press Meet are given below:

The Rupee has appreciated between 25th June 2006 and 25th June 2007 by 11.57%. On the other hand, Pakistan Rupee has depreciated by (-) 0.78%.

The Chinese Yuan has appreciated by 4.68% and Bangladesh Taka by 0.95%, during this period.

This steep appreciation has led to a decline in value terms (for the first time) in India's exports to USA (Jan-April 2007) by 1.48% and in the European Union (Jan-Feb 2007) by 12.61%.

This is a matter of grave concern as the industry in recent years has taken steps to improve the quality of products, reach higher levels of productivity, upgrade technological levels, modernize plants and machinery to meet the growing challenges of liberalized trade.

It is clear that despite raw material advantage, skilled labour force, relatively lower wages, India has not been able to leverage its comparative advantage in the sector to the fullest extent.

The Rupee appreciation has slowed down exports, thereby severely affecting production, capacity utilization & resulting in redundancy in employment.

Reports available indicate that a large number of small & medium sized producers of fabrics supplying to RMG units are facing closure as RMG exports have also declined sharply.

Apart from this, a shift in sourcing to other countries is making it virtually impossible to secure new orders. Once a market is lost to a competing supplier in another country, it is extremely difficult to regain confidence & renew contacts.


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